Aaaaaaaaaaaaaaaah the wonderful logic of Jean D’Ark, so precise and without rancour. Great piece that everyone should read.
Read this and weep Voreqe Bhainimarama, ig coupsters and coup apologists, you’d have saved face if you’d only complied with the directives to hold elections last month, March 2009.
JEAN D’ARKS REPLY TO BUDHAU ON THE ‘WHERE TO NOW IG?” POST………………………
Bud – sorry to have to rewind the clock a couple of days, but I’ve been too busy to blog over the past couple of days.
Anyway ” lets look at the facts: Over a five year period the SDL crowd doubled the public debt to $2.5 billion, that is 52% of GDP…”
Of course that is not as ideal a state of affairs – but it is hardly what anyone would call “bankrupt”. In fact, no reputable professional institution or academic ever made that claim. Sukhdev Shah tried it once, but has not repeated that mistake.
To take just one example for comparison, Ireland’s national debt level was nearly 100% before it embarked on its World Bank funded restructure program – and even that level it was never-ever referred to by anyone as “bankrupt”.
The meaning of “bankrupt” in the sense you are using it is basically the inability to pay debts or obligations when they fall due. That can become a problem if you have a lot of offshore debt obligations and get done in by unfavorable forex movements. But otherwise if most of your debt is local (as it is in Fiji’s case), it is relatively straightforward to estimate your future liquidity from economic growth forecasts against known debt repayment obligation schedules.
That is why the SDL Government’s 2005 Singapore bond float was over-subscribed by over 20 million dollars – the figures were pretty straightforward, and finance people who know how to check them didn’t find the national debt issue to be any significant risk to their repayment prospects.
What they didn’t know though, was that there were a whole bunch of clowns in Fiji who didn’t understand the basic fact that coups are FAR, FAR, FAR more damaging to an economy than a burgeoning national debt.
Compare that situation to today, where the national debt has been slightly reduced from previous levels. But were we to try a legitimate overseas bond float now, we wouldn’t see any real bidders for dust!
Your claims that there was no infrastructure expenditure under the SDL is flat-out false! They spent more money on infrastructure than ANY Government in Fiji’s history. These facts are easily verifiable from historical budget documentation.
The “consumption” you are referring to had nothing to do with capital and infrastructure spending. It existed as a result of the high operating cost of the civil service that was determined out of PSC negotiations and court precedent. The SDL couldn’t do anything about it then, and the IG is discovering that even guns and pro-Indian race-rhetoric can’t do anything about it today.
On the other hand, the main reason why Government’s Operating to Capital Expenditure ratio is so high in the first place, is due to none other than MP Chaudhry. In 1997, the then-RBF Board warned Government of the urgent need to alter this ratio from 80:20 to 70:30 if it wanted to have any real prospect of sustainable economic growth into the future. However ALL of the then-Government’s subsequent initiatives to bring Fiji into compliance with those guidelines were completely torpedoed in LoC negotiations and arbitration victories by Chaudhry as FPSA head.
Interestingly, one of Chaudhry’s main stated goals upon being appointed as iFM, was that he wanted to bring Government’s Op to Cap Exp ratio down from 80:20 to 70:30 . What hypocrisy!
As for Mahogany, I don’t know what you’re talking about. If anyone was going to run a scam on that, they surely wouldn’t have sat on their hands for six whole years and done nothing about it? They would have just jumped right in and had at it. But nothing happened.
And nothing is still happening. And that is a big problem, because the average age of Fiji’s Mahogany forests has now already passed the “useful” age of 30 years. But the IG still hasn’t got anything going with Mahogany. Thus another valuable resource is being pissed down the tube as a result of the 2006 coup and its subsequent lack of vision and management.
in the end, its easy to nitpick the SDL’s performance with 20:20 hindsight to see how they could have done better. But whatever you might think of their individual policy initiatives, the proof of their economic pudding comes down to one thing – economic growth. If you can’t generate that, nothing else really matters because growth means revenue, and revenue means the ability to fund projects, initiatives and operations.
In that respect, all the fine rhetoric and promises of the IG are meaningless because they have not been able to generate anywhere near the funding needed to fund implement their grand social engineering plans.
Meanwhile, tens of thousands of school-leavers enter Fiji’s decelerating job market every year with less and less prospects of actually finding a job. The military makes a big fuss about the putative “threat to national security” of its still-faceless bogie of “ethno-nationalism”. Meanwhile, it doesn’t seem to recognize that the increasing flood of jobless youth in a flat or shrinking economy, is any cause for concern. Or might also prove to be an even more potent hotbed for ethno-nationalism than any Land Claims Tribunal, or Traditional Fishing Rights bill.